Portland Virtual Power Plant

Portland General Electric is starting a virtual power plant pilot program and we've signed up for it. 

 A Virtual Power Plant is like Energy in the Cloud ☺

What is a Virtual Power Plant (VPP)? 

A VPP allows your electric utility to utilize residential energy storage systems to balance the grid energy needs. You may also see this referred to as utilizing "behind the meter assets." 

If you have a Tesla Powerwall (or another home battery system), normally, that battery in your garage or on the side of your home is only going to respond to your home's demands. Unlike solar, home batteries are usually not allowed to feed energy into the grid. A VPP frees your battery from this restriction and allows it to respond to the grid's needs too. A VPP can be used to reduce or eliminate spinning reserves or peaker plants. 

VPP Example

Say it's a hot day in August at 6PM. People arrive home and turn on their air conditioners (AC), fans, and start cooking diner. This places a big demand on the grid. Let's say that you have solar and home batteries. For round numbers, let's say your solar is generating 4kW, your home is using 2kW, and your batteries are full. The extra 2kW that your solar is generating helps the grid by effectively carrying the load of one additional home in your neighborhood. This is good, but not great since the Powerwalls are not being used in this first example.

Now, let's say it is peak price time and you are on a time-of-use plan. In this situation, your home battery would be discharging to carry your home's load. This allows the full 4kW from the solar panels to feed into the grid. This would mean that your solar would be carrying the load of 2 of your neighbors. This is better than the first example, but we can do even better. 

A VPP allows the utility to dispatch your batteries for more than just your home's needs. So on this hot day, when the grid is burdened, rather than firing up a peaker plant, the utility sends a dispatch message to your batteries (and hundreds of others) to ask them to start discharging near their sustainable rate. Let's say you have 2 Powerwalls and they can continuously discharge at a rate of 10kW. Now along with the solar, you are sending 12kW of power into the grid. This is enough to run 6 homes on your block.

Scenario	Solar Production	Powerwall  Output	Grid Feed-In	Homes Supported
Solar Only  (or Powerwall in Backup Only mode)	4kW	0	2kW	1
Powerwall with TOU	4kW	2kW	4kW	2
Powerwall with VPP	4kW	10kW	12kW	6

This example is for just one home. A virtual power plant could have hundreds or thousands of homes participating and if each of them can ease the grid of the burden of 4 to 10 other homes, then you start to see why the utilities are interested in this idea. 

How Much Of The Battery Capacity Can They Use?

You get to define the 'Power Outage Reserve.' This means you can keep whatever percentage of the battery you'd like for your own peace of mind. In the winter (when outages are more likely here), I keep the reserve at 60%. In the summer, I lower it down to 30%. Even if we have an outage during the summer, we have more energy coming from the solar panels, so I'm not worried about keeping the batteries too full. 

What's In It For Me?

Okay, this helps the grid, but it will cause extra cycling wear and tear on my battery and if there is a power outage, my battery might be lower than it would have otherwise been. Utilities don't expect you to do this out of kindness, there are incentives for participation.

VPP programs have various incentives and payments for the people that participate. Some give you several thousands of dollars of incentives to install home batteries, others even give you the batteries for free. Some pay you for every month that you are in the program, others pay you per event or per kWh.

The PGE program that I'm enrolling in will pay participants $20 per month if they have solar. Ironically, if you DON'T have solar, you get paid $40 per month. You are paid more because the utility can also charge your battery at their discretion when they have surplus power available. When you have solar, the rules are generally written such that you can only charge home energy batteries with solar. 

If you are participating in the Energy Trust of Oregon's Solar Within Reach program, you may be eligible for an instant $5,000 rebate in addition to the above monthly $20. 

If you are within one of PGE's 3 Smart Grid Test Bed areas and you are one of the first 200 to sign up, you may be eligible for an instant rebate of up to $3,000 in addition to the above monthly participation funds.

How Big Is The PGE VPP?

This is a 5-year pilot program with up to 525 homes and up to 4 megawatts of dispatchable power. That's an average of ~7.6kW from each home. Our 3 Powerwalls can provide about twice that much. I guess they expect the average participant to only have 1 or 2 Powerwalls or (more likely) they will not be using the system's full potential. 

Which Home Energy Storage Battery Brands Are Supported? 

The PGE VPP currently supports home battery systems from Generac, SolarEdge, Sonnen, Sunverge, and Tesla.

If you want Tesla Powerwalls and/or Solar, you can use my referral link.

If you want to sign up for PGE's VPP pilot, here's the link. 

Disclosure: 

I'm Long Tesla

Product Over Advertising - How Tesla Is Different #78

Tesla does not do things the way that other automakers do things. Whether it's how they recruit talent, create mega castings, or eschewing lidar and insisting that full self-driving can (in fact must) be done via camera alone, citing lidar and (more recently) radar as a crutch to camera vision that leads to a local maximum from whence the 100% goal cannot be achieved, Tesla does things their own way.

Elon Musk's appearance on Saturday Night Live is yet another example of this unique path. Commercials for the Audi E-tron, Ford Mustang Mach-E, Volkswagen ID.4, and Lucid Air all aired within the first 30 minutes of Musk's SNL episode. Lucid Motors even used the air time to debut their first ad for the Lucid Air with 500 miles of range, due later this year.

While the other automakers are paying for this air time, paying ad agencies to make the commercials, and paying marketing companies to craft their message, their executives review and refine ad pitches, Musk is doing none of this. 

The minimum SAG scale is currently $3,488 per week. NBC would be required to pay Musk at least this much for his time preparing, rehearsing, and shooting that week. So while other automakers were paying NBC for ad space, Musk was getting paid (albeit an insignificant amount for a billionaire). Whatever impression a 30-second ad spot had on the audience (if they even saw it) was far outweighed by Musk's air-time in front of the audience. 

           

Other car companies are paying for ads. Tesla is making a compelling product.

Musk has been asked many times why Tesla does not spend money on PR and ads. In the Q1 2021 financial update, one of the SAY investor questions asked why Tesla didn't hire a PR staff to fight the FUD. The answer was that the truth will come out, and that time, money, effort... would all be better spent making a better, more compelling, product, rather than “trying to trick people” with perfectly crafted messages.

In 2018, Musk said, “At Tesla, the thing we focus on is we put all the money and attention into trying to make the product as compelling as possible because I think that the way to sell any product is through word of mouth. The key is to have a product that people love.” – Elon Musk

Tesla is an engineering company first and foremost.

Tesla Powerwall Gave Us A Negative Electricity Bill!

Our electricity bill came with a credit. This is a first for us. We've had home solar since 2007 and we've never had a negative electricity bill. 

As you can see above, for this billing cycle, we used net 87 kWh; and yet our bill is negative. There are a few things that allowed this to occur. 

1. We are not driving our EVs as much with the new work from home program
2. Springtime is great, we get sunshine, but don't have to run the air conditioning (graph below)
3. We received a credit for entering our Powerwalls into our local utility's Smart Battery program

This last item on the list is how we were able to receive a credit, yet still some energy use. The 87 kWh is about $4 worth of energy. Along with the $10 connection fee and the various taxes, we owed about $15. Our partial month credit for joining the Smart Battery program was about the same. 

Next month we'll receive the entire $20 credit for the battery program, maybe that bill will be negative too.

Below, you can see as the seasonal sun comes out, our net grid use drops.

Tesla Powerwalls Run Our Neighborhood

 

We recently signed up for our local utilities smart battery program. It allows the utility to charge and discharge our battery when they need it. In return for making it available to them and when the grid needs a boost, we're credited $20 per month on our electricity bill.

Our battery system (3 Tesla Powerwall 2s) can discharge at up 15 kW sustained. This level of power would be able to remove the load of 6 to 10 homes (depending on their energy use) from the grid. 

Well, as you can see from the email above, the first event is starting today. They could be feeding the grid with our stored solar rays.

Better Together: Solar, EVs, Powerwalls, & Time-of-Use: Positive Feedback

It Started with an Electric Vehicle (EV)

We lucked upon a 1998 Chevy S10e EV after its fleet life at Disneyland had concluded. Driving an EV was fun and filling batteries with electricity was far cheaper than filling a gas tank. Annually our electricity bill was about $300, but we were saving about $2400 per year that we were previously spending on gas.

Charging the EV with Solar Photovoltaic (PV)

Then we wanted to make sure that the EV was powered by renewables, so we installed solar photovoltaic (PV) panels. This reduced our monthly electricity bill.

Time-of-Use Saved Us Even More

Now with PV panels reducing our daytime grid uses, we switched from the tiered flat-rate energy plan to a time-of-use (TOU) billing plan. The peak rates were higher than our old flat-rate plan, but the cheaper off-peak rates more than made up for it since we were now charging up the EV overnight. This further reduced our electricity bill.

More EVs Meant More PV

We had the bug. EVs were so fun. They were clearly the future of personal transportation and we wanted to be part of it. The Chevy was traded in for a Nissan Leaf and our Honda Passport was traded in for a Model X. We were now a two EV household. With another EV, we needed more solar panels. This time, not just to offset the new EV but also to reduce our grid use even further. 

Powerwalls Peak Shaver - Super Saver

Tesla Powerwalls were the last thing we added to this mix. The Powerwalls allow us to time-shift our solar usage. On TOU, the peak rate is about 3 times more than the off-peak rate. The peak times happen just before and just after typical solar production hours, so the solar alone was not helping us to avoid paying these high rates.

Our utility has a split peak during winter months, meaning there are morning peak hours (6AM - 10AM) and evening peak hours (5PM - 8PM). The solar panels are not producing significantly until 7AM and not much, if any, past 7PM. That meant that we were paying full peak rate for at least 2 hours each day, and anytime it was a cloudy day, you could add several additional hours.

However, Powerwalls changed all of that. Our grid energy usage during peak hours is now *negative*. 

EV, PV, TOU, and Powerwalls Working Better Together

The EVs charge overnight at the cheapest TOU rate. The Powerwalls discharge during the peak rate hours. Any solar power generated during peak hours is sent to the grid, running our meter backward during the most expensive electricity rate times. The mid-day sun recharges the battery. This means that we'll use some mid-day grid energy, but the mid-day TOU rate happens to be the same as our old flat-rate fee schedule. 

The graph above shows that electricity rates increase, our usage goes down. Other than a couple of hours mid-day while the batteries recharge, on even moderately sunny days almost all of our energy usage is now during off-peak hours. Here's an actual example, from March: 

There you have it. Despite having the significant electric demand of 2 EVs charging daily, air conditioning during the summer, and all the other normal household demands, the bulk of our electric bill (if not all) is for the cheapest rate. During off-peak hours (around here) the grid typically has surplus wind energy available so by shifting the bulk of our demand to hours that the grid has a surplus, we're helping to stabilize the grid while reducing our electricity bill.

If you want solar with Powerwalls, use our referral. 

Disclosure: I'm long TSLA

For Tesla Service Is The Key To Success

According to Tesla's Q1 2021 financial update, worldwide they have 561 store and service center locations. According to this search, about 120 of those service centers are in the US. Additionally, Tesla has 923 technicians in their mobile service fleet (rangers). Both of these (service locations and mobile service) are growing significantly (28% and 22% YoY respectively).

Although the growth is significant, it pales in comparison to the vehicle delivery growth (109% over the same year). Today, (and since 2019) Tesla is having (has been having) trouble keeping up with the load on service. You can find a long series of service complaints from Tesla owners. At the current growth rates, it does not look like this will be solved anytime soon. Service should be growing at a rate similar to vehicle delivery, not one-third to one-quarter the rate.
 

Compared To Other Auto OEMs

How does Tesla compare to other auto companies? Not surprisingly, Tesla does things very differently than the legacy companies. Legacy companies have dealerships. These dealerships are where most owners of legacy car brands have their vehicles serviced. 

Toyota (including Lexus) has about 1,500 dealerships in North America. 

Ford (including Lincoln) has about 3,000 dealerships in the US. 

GM has about 3,000 (mostly Chevy) dealerships in the US.

These legacy dealerships significantly outnumber Tesla's 120 service centers (you might even say an order of magnitude). Tesla's model of mobile service for many repairs certainly helps fill some of the gap (and, I can attest, it is far more convenient), but as Tesla continues to increase sales (approaching the levels of the above 3), they will have to increase service. It is vital to the customer satisfaction experience. 

Conclusion

Tesla does not advertise because word-of-mouth from happy customers brings in more customers. As Tesla continues to move from the enthusiast market into the mainstream, service will continue to become more important in order to have happy customers. People don't want to wait weeks for repairs. It's true that EVs don't need as much maintenance as gas-powered cars, but that does not mean that they will be issue-free; life happens and buyers want to have their car repaired and get back on the road quickly.

To this end, Tesla will need to significantly grow their service offerings at a rate that resembles their delivery rate.

Disclosure: I'm long TSLA

April 2021 Net Zero (plus a little)

We had our first net positive day of the year in March, now we've had our first net positive month. In April, our home electricity use was net zero. We used 1623 kWh and we generated 1652 kWh. 

This is with 2 electric cars, a little air conditioner usage (unusual in April), and all of the usual home appliance loads. 

Looking at the chart, you can see that solar production and energy use were pretty evenly matched throughout the month. 

The green chunk at the bottom is the three Powerwalls we had installed on the last day of 2020. About 25% of solar goes through them. This allows us to use solar at peak times even if the sun is not shining then. In fact, if the sun is shining then (which it usually is), we are able to feed the grid that solar during peak hours. That means we're net negative when the grid needs it most (and when it saves us the most money). 

Here's to many many more net negative months in the future.